CHART OF THE DAY: Massive Housing Overhang Will Swamp The Market

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The latest Case-Shiller reading showed another sequential uptick in July, which is all fine and well, but watch out: There’s a huge flood of houses being held back from the market, either due to bank-ownership, or loan delinquency.

Check out the chart below, from Amherst Securities.  It shows the number of delinquent mortgages that have yet to be liquidated– a number that Amherst puts at a shocking 7 million (135% of the number of houses sold in a year right now).  Eventually the houses attached to these loans have to hit the market.  When they do, expect them to go at a firesale.

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